Arqit Quantum Inc. (NASDAQ:ARQQ) Q4 2022 Earnings Conference Call December 14, 2022 11:00 AM ET Company Participants David Williams - Founder, Chairman and CEO Nick Pointon - CFO Conference Call Participants Scott Buck - H.C. Wainwright Nihal Choksi - Northland Capital Markets Operator Good day and welcome to Arqit's 2022 Fiscal Year Earnings Conference Call. On today's call, we will be referring to the 20-F and press release filed this morning that details the company's full fiscal year-end 2022 results, w ...

Arqit Quantum Inc. (NASDAQ:ARQQ) Q1 2022 Earnings Conference Call May 12, 2022 11:00 AM ET Company Participants David Williams – Founder, Chairman and Chief Executive Officer Nick Pointon – Chief Financial Officer Conference Call Participants Scott Buck – H.C. Wainwright Simon Strong – Cenkos Operator Good day and thank you for standing by. Welcome to the Arqit Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer ses ...

Arqit Quantum Inc. (NASDAQ:ARQQ) Q4 2021 Earnings Conference Call December 16, 2021 10:30 AM ET Company Participants David Williams - Founder, Chairman & Chief Executive Officer Nick Pointon - Chief Financial Officer Conference Call Participants Operator On today's call we will be referring to the Forum 20F and press release filed this morning that detail the Company's Fiscal Year End 2021 Results, which can be downloaded from the Company's website at arqit.uk. You'll also find the latest earnings presentat ...

Fiscal Year 2021 Results Overview [Management Commentary](index=1&type=section&id=Management%20Commentary) Arqit's FY2021 was transformative, marked by commercial launch, NASDAQ listing, and over **$130 million** in revenue contracts - The company launched its business after four years of development, creating technology to solve current and future encryption problems posed by **quantum computers**[2](index=2&type=chunk) - The NASDAQ listing in September provided Arqit with **enough capital** to fund its business plan and launch its full commercial service[2](index=2&type=chunk) - Customer billings commenced in Q4 2021, and over **$130 million in revenue contracts** were announced with significant global corporations and governments[2](index=2&type=chunk) - The company is initially focusing on a channel strategy targeting defence, financial services, telecoms, and IoT to generate early revenues[3](index=3&type=chunk) [Fiscal Year 2021 Operational Highlights](index=1&type=section&id=Fiscal%20Year%202021%20Operational%20Highlights) Arqit achieved significant FY2021 operational milestones, including QuantumCloud™ launch, key agreements, and expanding its IP portfolio - **QuantumCloud™ Release 1.0** was launched in July with **full commercialization in September**[4](index=4&type=chunk) - Signed **key agreements and contracts** with leading global organizations, including BT Group, Sumitomo, Northrop Grumman, Dentons, Juniper Networks, and Babcock[4](index=4&type=chunk)[5](index=5&type=chunk) - Formed an **international federation of G7 companies and government organizations** to provide private instances of Arqit's technology stack[5](index=5&type=chunk) - Increased its filed patent portfolio to **1,435 patent claims** on 21 pending or allowed patents[6](index=6&type=chunk) [Fiscal Year 2021 Financial Highlights](index=2&type=section&id=Fiscal%20Year%202021%20Financial%20Highlights) Arqit's FY2021 financial highlights include significant NASDAQ proceeds, substantial cash, and a reduced adjusted loss before tax Key Financial Metrics for Fiscal Year 2021 | Metric | Value (USD) | | :--- | :--- | | Net proceeds from NASDAQ listing | c. $96 million | | Cash and cash equivalents | $86.9 million | | Loss before tax (IFRS) | $271.7 million | | Adjusted loss before tax (Non-IFRS) | $15.6 million | [Fiscal Year 2022 Outlook and Recent Developments](index=2&type=section&id=Fiscal%20Year%202022%20Outlook%20and%20Recent%20Developments) Arqit anticipates strengthening demand in FY2022, with planned QuantumCloud™ releases, a 2023 satellite launch, and recent new agreements - The company believes its product is **superior to alternatives** like Post Quantum Algorithms, which are **not definitively quantum safe** and are **difficult to implement on small devices**[8](index=8&type=chunk) - **QuantumCloud™ Release 1.1** is scheduled for **February 2022**, and **Release 1.2** will launch by the **end of 2022**. The **first satellite** is planned for a **2023 launch**[10](index=10&type=chunk) - Since the fiscal year-end, Arqit has announced **new agreements** with Blue Bear Systems Research Ltd. and NEOM, with **more contract announcements expected** in the near term[11](index=11&type=chunk) Financial Disclosures and Reconciliations [Use of Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses 'adjusted loss before tax,' a non-IFRS measure, to monitor ongoing financial performance by excluding non-recurring and non-cash items - Adjusted loss before tax is a **non-IFRS measure** used by management to monitor **ongoing financial performance**[12](index=12&type=chunk) - This measure **excludes non-recurring items** (reverse acquisition expense, Nasdaq listing expense) and a **non-cash expense** (change in fair value of warrants) to **better reflect standard operations**[12](index=12&type=chunk) [IFRS and Non-GAAP Loss Before Tax Reconciliation](index=4&type=section&id=IFRS%20and%20Non-GAAP%20Loss%20Before%20Tax%20Reconciliation) The company reconciles IFRS loss before tax to non-GAAP adjusted loss, adjusting a **$271.7 million** IFRS loss to a **$15.6 million** adjusted loss Reconciliation of IFRS to Non-GAAP Loss Before Tax (Year ended 30 September 2021) | Description | Amount (USD) | | :--- | :--- | | **Loss before tax on an IFRS basis** | **(271,729,101)** | | Reverse acquisition expense | 155,459,939 | | Change in fair value of warrants | 98,090,070 | | NASDAQ listing expense | 2,589,611 | | **Adjusted loss before tax** | **(15,589,481)** | - The reverse acquisition expense is a **non-cash, non-recurring charge** representing the premium paid for obtaining the public listing[14](index=14&type=chunk) - The change in fair value of warrants is a **non-cash expense** required by IFRS, and NASDAQ listing expenses are **non-recurring**[15](index=15&type=chunk) [Other Accounting Information](index=4&type=section&id=Other%20Accounting%20Information) As of September 30, 2021, Arqit reported **$114 million** in assets, **$87 million** cash, and **$148 million** in liabilities, with **$128 million** from warrants Balance Sheet Summary (as of September 30, 2021) | Item | Value (USD) | | :--- | :--- | | Total Assets | $114 million | | Cash (included in Total Assets) | $87 million | | Total Liabilities | $148 million | | Warrant Liabilities | $128 million | | Other Liabilities | $20 million | Company Information and Disclaimers [About Arqit](index=5&type=section&id=About%20Arqit) Arqit provides QuantumCloud™, a quantum encryption Platform-as-a-Service, enabling networked devices to create secure, zero-trust encryption keys against cyberattacks - Arqit supplies a **quantum encryption Platform-as-a-Service (PaaS)** named **QuantumCloud™**[17](index=17&type=chunk) - The product enables any networked device to download a software agent to create **secure, one-time use, zero-trust encryption keys** to protect against attacks, including from **quantum computers**[17](index=17&type=chunk) [Caution About Forward-Looking Statements](index=5&type=section&id=Caution%20About%20Forward-Looking%20Statements) This section contains a standard legal disclaimer on forward-looking statements, highlighting risks and uncertainties that could cause actual results to differ materially from expectations - The communication includes **forward-looking statements** that involve **risks and uncertainties**, and **actual results may differ materially** from current expectations[18](index=18&type=chunk) - **Key risk factors** include disruption from the business combination, ability to maintain stock listing, converting pipeline to revenue, successful delivery of technology, and enforceability of intellectual property[18](index=18&type=chunk)